Carol B. Tomé: Together UPS and USPS have developed an innovative solution

Carol B. Tomé: Together UPS and USPS have developed an innovative solution

UPS  has been awarded a significant air cargo contract by the United States Postal Service (USPS). UPS replaces FedEx after more than 20 years.

This award is effective immediately and greatly expands the existing relationship between the two organizations. Following a transition period, UPS will become the USPS’s primary air cargo provider and move the majority of USPS air cargo in the US.

“Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique, reliable and efficient integrated network,” said UPS Chief Executive Officer Carol B. Tomé.

In a Form 8-K filed with the Securities and Exchange Commission on April 1, 2024, FedEx Corporation announced the agreement between FedEx Express and the United States Postal Service (“USPS”) for domestic transportation services will expire by its terms on September 29, 2024. This decision was made on March 29, 2024, following extensive discussions.

A statement on the FedEx website said: “The United States Postal Service have had a long and productive relationship for more than 20 years. Over time, our respective strategies have shifted as we transform our networks and operations for the future.

We have long said we would extend the contract with the USPS if we could agree to commercial terms in the best interests of FedEx shareholders. Although we were unable to reach mutually agreeable terms, we remain committed to delivering outstanding service through the completion of our contract in September.

Upon the conclusion of the contract, we will implement adjustments to our network that will drive efficiencies and create more flexibility. The elimination of structural costs currently in place to support postal service volume will be addressed and, in conjunction with our DRIVE efforts, FedEx profitability will improve in FY25 and beyond.”

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